You are assuming that the management is rational at your company. That's quite a big 'if'.

If they flag you and management is not rational that's one big red flag to leave that place ASAP

This is the thing that many people in this discussion are missing. There are many many many bad managers out there. Maybe this thread has all the good tech managers in the industry who would never do anything against their employees interest - but that isn't the reality facing most tech workers.

In my experience - good managers tend to get promoted quickly, while average/below average line managers tend to stagnate. In this environment, it's likely most line managers aren't the greatest managers and the ones interacting directly with ICs have a lot of skills to develop in the manager role.

The reality of most people is that they go to the job for a paycheck and put up with the (bad) management as a cost of that. In this environment, the most effective path towards higher pay is switching jobs, instead of risking navigating the inclinations of typically bad management.

Job market isn't equally friendly for all of IT around the world.

Why do you want to stay at a company in this situation, then?

You may not have other option. IT workers aren't drowning in jobs in many places around the globe.

Asking for 30% or else, is kind of assholish. But quite reasonable for new job.

Not if you're making 40% below market (and can prove it).